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At the Point Where the Budget Line Is Just Touching

Question 221

Multiple Choice

At the point where the budget line is just touching an indifference curve at one point,


A) the slope of the budget line is equal to the slope of the indifference curve.
B) the marginal rate of substitution equals the relative price.
C) the consumer can change his or her consumption and can move to a higher indifference curve.
D) Both answers A and B are correct.
E) Both answers B and C are correct.

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